Tuesday, August 21, 2007

The Chinese Webkinz

You've heard all about the American efforts atretail/online mashups -- Webkinz, Bratz, and Barbie. Now, Red Mushroom, a Chinese game developer is attempting to launch a Webkinz/Neopets inspired kids brand, BaoBao BengBeng,that will integrate a virtual world with a plush doll sold in retailstores. In an Asian business model twist on the theme, the world willbe free to play, but users will have the opportunity to acquire virtual goods and services via "point cards" purchased in the real world.

Internet penetration in China has seen incredible growth. From a mere 23 million Internet users in 2000, a June report from the Chinese Internet research agency (CNNIC)projected that the country has over 162 million Internet users. Thoughthey haven't released an age breakout for the most recent numbers, overthe past few years, the under-18 population has run about 16-18%. Wecan estimate that there are about 28 million Internet-connected Chinesechildren.

Unsurprisingly, some real problems and a healthy dose of fear haveaccompanied this massive change in youth behavior. Game/Internetaddiction and its rehabilitation have sparked many a journalist'simagination in both China and the West. China's government has actually instituted a unique fatigue system,which aims to reduce the legendary stickiness of online games byreducing the amount of credit young gamers receive after three hours ofplay. It has also provided a branding opportunity for companies likeRed Mushroom who can market their products as parent-friendly bydeclaring them "Fatigue System Compliant!"

Red Mushroom plans a "city by city" rollout of the dolls starting inBeijing and pushing out to other first-tier cities like Shanghai andShenzhen. They are partnering with an education company and will betargeting all the online and mom-and-pop toy retailers they can find.Of course, the hope with these offline/online hybrids is to create aself-reinforcing system where real world retail sales drive the onlineworld as the online world drives retail sales.

If BaoBao BengBeng succeeds, it obviously wouldn't be the first timethat a Western media meme took off in China. Chinese media blog Danweihad great coverage on the Super Voice Girls "frenzy" of 2006 when the so-called American Idol for China swept the country.